Gold and silver prices increased on Wednesday following two days of decline, driven by renewed buying interest influenced by global macro-economic conditions. Factors such as easing US-Iran tensions due to progressing negotiations and a stronger US dollar limited gains by reducing safe-haven demand. The Lunar New Year holidays in various Asian markets led to thin liquidity, acting as a hindrance to the market rally, as per industry experts.
MCX gold April futures saw a rise of 1.24% to reach Rs 1,53,294 per 10 grams during the day. Similarly, MCX silver March futures surged by 3.81% to Rs 2,37,490 per kg. In the international market, gold prices fell below $4,900, with decreasing Treasury yields providing only limited support and maintaining a cautious sentiment in the commodities sector.
Following talks in Geneva, Iran and the US agreed on fundamental principles to guide future nuclear negotiations, raising hopes for diplomatic progress. Iranian Foreign Minister Abbas Araghchi noted the constructive nature of the discussions, with plans to draft and exchange texts for a potential agreement, although he emphasized that a final deal was not imminent. Araghchi also urged the US to cease threats of force against Iran, as reported by various sources.
Despite a decline in prices, gold ETF holdings continued to rise, indicating sustained institutional interest, while physical demand in India and China remained strong, with India’s January imports showing an increase. Analysts attributed the volatility in silver prices to a demand-supply imbalance and profit-taking following significant gains over the past year, while gold maintained its elevated position compared to recent weeks.
The dollar index rose by 0.10% to 97.25, resulting in higher costs for greenback-priced bullion for holders of other currencies. An analyst highlighted that gold has support levels at Rs 1,49,800 and Rs 1,47,700, with resistance at Rs 1,53,150 and Rs 1,55,500. For MCX silver, support levels were noted at Rs 2,24,400 and Rs 2,18,800, with resistance at Rs 2,32,200 and Rs 2,36,000.
